New Legislation boosts SBA Oversight Over 7(a)
This month, the Small Business 7(a) Lending Oversight and Reform Act of 2018 was put forth by a bipartisan team of lawmakers. If approved, the bill will increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program, which aids small businesses and entrepreneurs as they set out to launch or grow their enterprises.
Via press release, the pending legislation was credited with “preserving” the 7(a) loan program by strengthening the SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director, enhancing SBA’s lender oversight review process, including increasing the office’s enforcement options, requiring SBA to detail its oversight budget and perform a full risk analysis of the program annually and enhancing the organization’s “Credit Elsewhere” test.
“The 7(a) loan program has leveraged billions of dollars to help America’s small businesses thrive,” said Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (R-ID) via the release. “By bolstering the SBA’s oversight office and providing the Administrator with flexibility to increase the program’s maximum lending authority in the event it would be reached, this bill will ensure the strength of the program into the future, guaranteeing that entrepreneurs will have access to the critical capital they need to build and grow their businesses.”
He continued, stating that the “bipartisan and bicameral support for this effort underscores just how important the 7(a) program, and the capital it provides, is to our nation’s small business owners.”
“The House Small Business Committee has a long tradition of working across the aisle to promote opportunity and job growth for America’s small businesses and, central to that effort, is ensuring entrepreneurs can access adequate capital to grow their operations,” said Congresswoman Nydia Velázquez (D-NY) in agreement.
“Since its inception, the 7(a) initiative has provided new and existing ventures with financing to grow and create jobs in local communities,” she added. “Under this legislation, SBA will have more tools to meet small businesses’ needs. I’m particularly pleased the bill includes provisions from my legislation allowing SBA to raise its 7(a) lending cap, so there’s no interruption in the flow of loans to small firms.”Last modified: January 17, 2018